6 Annual Big Press Conference Part 7
February 1,2007
President of Russia V.Putin
Round Hall,the Kremlin,Moscow
S. SANNIKOVA (Moya Udmurtia TV channel, Izhevsk): Good afternoon, Vladimir Vladimirovich. Gazprom plans to liberalise gas prices on the domestic market soon. What impact will this have on the social sphere?
VLADIMIR PUTIN: Gazprom cannot liberalise anything, including prices, without a corresponding decision from the Russian Government. The Russian Government has, in my view, made carefully considered decisions regarding energy development. This concerns not only gas prices but also electricity, nuclear energy and hydro-energy prices, and market regulation and deregulation. What is the actual issue here? If we take the resource in question, gas, the issue is that gas is regulated and sold on the domestic market at non-market prices, and this leads to a situation where the entire economy, the housing and utilities sector, the population in general and all heat and energy consumers, become dependent on one primary energy source. This has a negative impact on all the other segments of the energy sector. This is dangerous from the point of view of ensuring energy supplies for the population and the national economy. We realise that this system is quite vulnerable and that we need to achieve more balanced energy consumption. Even if you put a policeman to watch each consumer, they will still use whatever is cheapest. This is why we need prices that make it equally profitable to sell energy resources on the domestic market and sell them abroad. But on the domestic market, given transport costs, and given the export duties, which dont exist on the domestic market, of course, gas will always be 40-45 percent cheaper.
The government has decided that gradually, over a four-year period, reforms will be carried out in the energy sector in order to make it more balanced, viable and competitive. Our economy is three-four times more energy-intensive than the economies of our main competitors in Western Europe, North America, and even China. If we continue developing our economy this way we will never become a leader and will always lag behind. This is the basic reason why we simply must introduce the kinds of regulation I just mentioned. But as I said, this will be a gradual process. It will proceed at quite a high pace for the economy, but will nonetheless be gradual 15 percent this year, 25 percent in 2008, then 26 percent. Then thirteen percent a year, it is quite a lot, but the government has decided that subsidies and tariff regulation for electricity supplies to the population, which is the biggest expense for households, will continue even after 2011, and at least until 2015. Subsidies on the electricity market, in particular, will start being phased out only after a system has been put in place to provide subsidies to those groups of the population who need them. Such decisions have been approved today, at any rate, and I hope that they will be maintained after 2007 and 2008.
O. SHCHEDROV (Reuters): Thank you.
Vladimir Vladimirovich, I would like to come back to the question asked by my colleague, Mr Kondratyev, from NTV. I wont use the word successor, but the fact remains that you are the most popular and the most influential politician in the country and your view, in the analysts opinion, will be decisive for the presidential hopes of any candidate in the presidential election. The problem today, though, is that most of the other politicians around at the moment are not experienced political campaigners and have not yet shown themselves to be political heavyweights.
My question therefore is when, as you have hinted you may do, will you indicate the candidate that you think would be best suited to becoming the next president? Can we expect this to happen this year? Could this person be a high state official? This is a question that many voters and investors are asking.
Thank you.
VLADIMIR PUTIN: Everyone who should be is already working as high state officials. We should not be running round in a fuss over the upcoming elections, but, as I said, should be ensuring that our citizens have the chance to make an objective choice and ensure that they can make their choice in free and democratic fashion.
I am also a citizen of this country, a fact of which I am very proud, and I reserve the right to express my preferences, but I will do this only once the election campaign begins.
A. GROMOV: Vladivostok, the floor is yours, but a little more calm, please.
M. SOLOVYENKO (Narodnoye Veche newspaper, Vladivostok): Good afternoon, incomparable Vladimir Vladimirovich.
VLADIMIR PUTIN: You make me feel quite embarrassed.
M. SOLOVYENKO: Im happy to hear that. Thats just what a woman is supposed to do. Do excuse me, of course.
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Путину
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